India Now - page 36

manufactured auto components.
Besides, an event held on June 7–8
in Cairo saw more than 40 leading
Indian auto component manufacturers
showcasing their aftermarket products
to the Egyptian spare part dealers,
distributors, importers and original
equipment manufacturers (OEMs) of
cars, trucks and motorcycles.
Ramesh Suri, President, ACMA,
appreciates the role played by the
OEMs in the growth of the Indian auto
components industry. Today, India
exports auto components to more than
160 countries and the market has been
growing at 15 per cent per annum over
the past six years. “The OEMs have
helped the auto component sector in
India absorb global best practices,”
says Suri. Global automakers operat-
ing in India are now looking to source
parts locally in order to cut costs in a
market dominated by cheap small cars
and the move is set to throw open new
growth opportunities for the Indian
auto component sector. “In the auto
sector, India has emerged as the hub
for value for money vehicles. The thrust
on manufacturing will help boost the
GDP, which in turn will boost the auto
industry. The other important effect of
this call will be the increased invest-
ments in infrastructure which will
boost the commercial vehicle industry.
Overall, this will have a positive impact
and see the component industry grow
at a faster pace. Further, ‘zero defect’
will enhance India’s image and com-
petitive position in the global market,”
says Ajay Tandon, MD & CEO, Tata
AutoComp Systems Limited.
Growth Saga
In the current fiscal, ICRA expects the
domestic auto component industry
to grow by 9–11 per cent, supported
by volume growth in the domestic
passenger vehicle and medium and
heavy commercial vehicles (M&HCV)
industry apart from healthy export
growth. “Whilst the actual data for the
component industry for fiscal 2014-15
is awaited, we expect the component
industry to grow in the range of 8–10
per cent. The industry is expected to
pick up in the second half of FY16
and beyond into FY17. That apart, the
performance on the export front has
also been robust and auto component
export is expected to have grown by
over 10 per cent compared to 5.4 per
cent in FY14,” said Suri. “Over the
medium to longer term duration, the
domestic automotive as well as auto
component industries are expected
to grow at a healthy pace given rising
disposable income, improving road
infrastructure, low vehicle penetration
levels as compared to other developing
nations and weak public transport
infrastructure,” reasons Ray.
According to a July 2014 report by
ACMA, exports by the Indian auto com-
ponent industry grew from US$ 5.1 bil-
lion in 2008-09 to US$ 10.2 billion in
2013-14, at a compound annual growth
rate (CAGR) of 15 per cent over these
six years. The sector witnessed export
growth of around 17 per cent during the
first six months of financial year 2014-
15, the report said. In addition, exports
are projected to reach US$ 12 billion by
FY 2015-16 and add up to US$ 30 bil-
lion by FY 2020-21, the report added.
“We strongly feel that given a stable and
conducive policy regime, the compo-
nent industry will be able to reach the
mark of US$ 100 billion by 2020 with
exports growing to US$ 30–40 billion
and turnover from overseas assets of
Indian auto component manufacturers
growing from the current US$ 6 billion
to US$ 20–22 billion,” Suri says.
Government Stimulus
The Government of India allowed 100
per cent foreign direct investment (FDI)
“Over the medium to
long term duration,
the domestic
automotive as well
as auto component
industries are
expected to grow at a
healthy pace...”
Subrata Ray
Senior Group Vice President, ICRA
“We have to change
our mindset to get
to zero defects, right
from development
concept down
to production
Vishal Agarwal
President, Yudo Hot Runner India
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